BEIJING, March 7 -- Angola's state oil company said it ended talks with China Petroleum & Chemical Corp to invest in a 3.7 billion U.S. dollars oil refinery, threatening Chinese plans to boost energy cooperation in Africa, Bloomberg News reported yesterday.

    Sonangol, based in the Angolan capital Luanda, is seeking to cut the cost of the 200,000 barrel-a-day plant and may start construction in the second half of this year, Vice President Anabela Fonseca said yesterday at an oil refiners' conference in Cape Town, South Africa.

    "Sonangol has decided very recently to carry out this project on its own," she said. The Sonaref project in Lobito municipality "is under way."

    China plans to increase investment in Africa to tap oil and natural gas resources. China's government offered a 2 billion U.S. dollars loan to Angola through Eximbank, state-owned Angola Press Agency reported on June 22. That's in addition to 2.4 billion U.S. dollars of credit provided in March 2006.

    Angola's crude oil exports to China rose 34 percent to 23.4 million metric tons, or about 470,000 barrels a day, last year, according to the Beijing-based Customs General Administration.

    "Sinopec's decision to pull out of the Angolan oil refinery project makes commercial sense," said Gordon Kwan, CLSA Ltd's Hong Kong-based head of China oil and gas research. Building refineries in China rather than overseas "strengthens China's national energy security by having refining assets on its soil."

    The plan to tap oil from Nigeria also received a potential setback on Monday, when a government official said plans for China to have preferential rights to invest in a refinery in Kaduna may be revoked.

    (Source: Shanghai Daily)